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Staccato verdict on Anchor Borrowers Programme

By Gbenga Akinfenwa
12 March 2023   |   4:00 am
“The poultry farmers in Lagos State were marginalised from the Anchor Borrowers Programme (ABP). Loans were given to faceless poultry farmers.

“The poultry farmers in Lagos State were marginalised from the Anchor Borrowers Programme (ABP). Loans were given to faceless poultry farmers. Our association did not participate in the scheme because the Central Bank of Nigeria (CBN) did not agree to our terms and conditions.

“They went ahead to meet some farmers, who were not part of our association, but the scheme did not succeed. They offered interest rate of nine per cent as against five per cent and presented one person as an off-taker, while we wanted it decentralised because centralisation will not pay us.

“As far as poultry farmers are concerned in Lagos, ABP is a failure because we didn’t participate and the fund meant for real poultry farmers were diverted and given to unknown farmers, who were not able to pay back.”

These statements reflect the position of the Chairman of the Lagos chapter of Poultry Association of Nigeria (PAN), Mr. Godwin Egbebe, in a recent chat where he told The Guardian how the association was schemed out of the scheme.

His submission appears to tally with the assessment of the International Monetary Fund (IMF) on the initiative. Last week, the body, which carpeted the implementation of the scheme, said the agricultural credit has not significantly boosted production even though there is the challenge of targeting the right recipients for the credit.

It identified poorly targeted loan recipients, use of funding purposes unrelated to agriculture, weak incentive regarding repayment structure, among other factors for its perceived failure.

In its latest country report titled ‘Nigeria: Selected Issues,’ IMF disclosed that about N1.4tr or 76 per cent of the N1.9tr loans collected by farmers under the ABP initiative remain unpaid as at January 2023.

The document read, “For the Anchor Borrowers Programme, repayment is
also low at 24 per cent, especially since repayment can be made in kind, thereby limiting the tenor of the loans to one year.”

The report also showed that yields were lower in Nigeria than in other countries due to scarcity of inputs such as fertilizers, modern irrigation methods, and mechanisation.

But the CBN had since countered the assertion, noting that the total loan repayments under the scheme stood at 52 per cent in February.

In a statement released last Monday by its acting Director of Corporate Communications Department, AbdulMumin Isa, the apex bank disclosed that it had released N1.079tr as of February 28, of which N960b was due for repayment.

He said the ABP supported about 4.57 million smallholder farmers who cultivated over 6.02 million hectares of 21 commodities across the country.

He said the programme also helped to improve the national average yield per hectare of these commodities, with productivity per hectare almost doubling within the eight years of the programme’s implementation.

The CBN spokesperson explained that the outstanding due balance on loans was still under moratorium due to the COVID-19 forbearance granted to beneficiaries of the bank’s interventions in March 2020 and extended to February 2022.

Launched on November 17, 2015, the ABP was aimed at creating a linkage between anchor companies involved in processing and smallholder farmers of key agricultural commodities.

The thrust of the ABP is the provision of farm inputs in kind and cash (for farm labour) to smallholder farmers to boost production, stabilise inputs supply to agro-processors and address the country’s negative balance of payments on food.

It is loan to farmers without collateral. The beneficiaries are given farm inputs and cash to cultivate their farms, including the experiment on rice, which government claims has achieved huge success.

Since inception, the scheme has been plagued with allegations of favoritism by regions and farmers associations that claim to have been sidelined; a development that has kept tongues wagging on what they termed lopsidedness of the scheme by its managers.

Corroborating the position of Ebegba and other farmers, the Chairman of the All Farmers Association of Nigeria (AFAN), Lagos chapter, Femi Oke, described the scheme as ‘not too impressive,’ noting that except few commodities’ farmers that accessed the fund, others were shut out.

He said: “At the initial stage, it was the Bank of Agriculture (BoA) that handled it. We invited them to our meeting and we introduced our farmers in the few commodities listed; that was the only thing I know of the scheme.  I don’t have the figure of ABP’s disbursement to Lagos or the number of beneficiaries because we were not carried along.”

He said the problem was that handlers of the scheme failed to hook up with the umbrella body of farmers and work closely with the body, which should be able to identify real farmers.

Industry players claim that despite the CBN’s counter-reaction that 52 per cent of the loan has been recovered, the failure of most of the farmers in some states to repay their loans running into billions of naira, appears to have negatively impacted massive food product ion in the country.

The Guardian learnt that since the ABP took off, the attitude of some beneficiaries, most of whom have bluntly refused to repay the loans has become a source of concern to many stakeholders, who fear that the action could send the wrong message to groups, both local and international with plans for similar intervention to strengthen the sector.

While some farmers alleged that the conditions for the loan’s repayment were quite stringent, some are said to be of the view that there was not enough enlightenment to intimate farmers that the loans were repayable; hence some of them saw it as a reward for voting for President Muhammadu Buhari in 2015.

It was learnt that in Kano, Kaduna, Kebbi and other states, mobile courts, task force, Product Monitoring Team (PMT), engaging Islamic cleric for sensitisation on the obligation of repayment and other methods to retrieve the loan from defaulters.

Though the efforts yielded results, but it was discovered that what was recovered was a far cry from several billions disbursed to farmers.

REACTING to the assertion made by the IMF, the former Lagos Chamber of Commerce and Industry (LCCI), Agric, who doubles as the Managing Director of Bama Farms, Mr. Wale Oyekoya, said the scheme, initiated to assist farmers productivity has turned out to be nightmare and corruption in the hands of the handlers.

“Ninety percent of the money has ended up in the account of political and portfolio farmers. ABP has no impact on the agricultural sector as some political farmers used the money for mundane things.

“Even the MD of the fund was indicted for misappropriation of billions of this fund, too much corruption in the system. Some state governors took some millions from the fund and nothing to show for it.
High cost of foodstuffs is attributed to some of this corruption in the system with no accountability.

“I know some lawmakers that took billions from this funds and diverted it to their political farms and nothing to show for it. Real farmers really suffered under this scheme as farmers’ information were gathered and nothing happened and CBN was well aware of it. The scheme is supposed to assist farmers in processing and marketing, instead it forced some farmers to fold up thereby leading to food crisis in the country.”

Oyekoya said the farmers are hoping that president-elect’s Renewed Hope mantra will focus on a better agenda in the agricultural sector, where farmers that produced highest labour in the country will be respected and taking seriously.

“The fund is supposed to boost our mechanised farming by purchasing tractors for farmers, but the corrupt leaders denied us mechanisation. I am a typical example as I have over 100 acres of farmland in Lagos with no single tractor to farm, state and Federal Government sent their representatives with media to my farm and promised to give me tractors when they saw my workers using cutlasses and hoes on that huge farmland.

“After three years, no tractor and I am sure the officials collected my information to procure the tractors.  So many stories like that from farmers both in the livestock and crops.”

The Chief Executive Officer of Green Sahara Farms, Plateau State, Dikwa, who confirmed the allegations of marginalisation and disbursement of the loans to non-farmers, said the situation does not only reflect the reality of the ABP, but for all government interventions, defined by who you know and willing to give kick back.

He said: “How can they recover such funds from rural farmers dispersed all over the north? The only reason they opened accounts was to benefit from the scheme. They simply abandoned the accounts after getting the loans. There is this feeling that after all, politicians and public servants are stealing their commonwealth, so this is their share.”

However, The Guardian contacted the CBN’s acting Director of Corporate Communications Department, Isa on phone to comment on the allegations raised by the farmers. Though he picked the call but he couldn’t respond due to network problem.

Messages were however sent to him, but he is yet to reply as of the time of publication.